Exclusive: CIA Helped Saudis in Secret Chinese Missile Deal

The spy agency held secret meetings with Saudi air force officers, overseeing the technical details of the kingdom’s purchase of East Wind ballistic missiles Ibraheem Abu Mustafa/Reuters

Saudi Arabia has long been a backroom player in the Middle East's nuclear game of thrones, apparently content to bankroll the ambitions of Pakistan and Iraq (under Saddam Hussein) to counter the rise of its mortal enemy, Iran.

But as the West and Iran have moved closer to a nuclear accommodation, signs are emerging that the monarchy is ready to give the world a peek at a new missile strike force of its own - which has been upgraded with Washington's careful connivance.

According to a well-placed intelligence source, Saudi Arabia bought ballistic missiles from China in 2007 in a hitherto unreported deal that won Washington's quiet approval on the condition that CIA technical experts could verify they were not designed to carry nuclear warheads.

The solid-fueled, medium-range DF-21 East Wind missiles are an improvement over the DF-3s the Saudis clandestinely acquired from China in 1988, experts say, although they differ on how much of an upgrade they were.

The newer missiles, known as CSS-5s in NATO parlance, have a shorter range but greater accuracy, making them more useful against "high-value targets in Tehran, like presidential palaces or supreme-leader palaces," Jeffrey Lewis, director of the James Martin Center for Nonproliferation Studies at the Monterey Institute of International Studies, tells Newsweek. They can also be fired much more quickly.

The poor accuracy of the old DF-3s rendered them impotent during the first Gulf War as a counterstrike to Saddam Hussein's Scuds, according to Desert Warrior, a 1996 memoir by Saudi Prince Khaled bin Sultan, then-commander of the Riyadh's Air Defense Forces. King Fahd declined to fling them at Iraq because the likely result would have been mass civilian casualties, and "the coalition's air campaign being waged against Iraq was sufficient retaliation," Khaled wrote.

When that war ended, the Saudis went looking for something better. In China, they likely found it. But unlike in 1988, when they royally annoyed Washington with their secret acquisition of DF-3s, this time they decided to play nice. And the CIA was their assigned playmate.

CIA and Saudi air force officers hammered out the ways and means for acquiring the new Chinese missiles during a series of secretive meetings at the spy agency's Langley, Va., headquarters and over dinners at restaurants in northern Virginia during the spring and summer of 2007, a well-informed source tells Newsweek. The arrangements were so sensitive that then-deputy CIA director Stephen Kappes ordered the CIA's logistical costs, estimated at $600,000 to $700,000 buried under a vague "ops support" heading in internal budget documents - prompting loud complaints from the head of the agency's support staff.

Aside from technical personnel, among the few CIA officials let in on the deal were the agency's then-number three, Associate Deputy Director Michael Morrell, a longtime Asia hand; John Kringen, then-head of the agency's intelligence directorate; and the CIA's Riyadh station chief, who Newsweek is not identifying because he remains undercover. Two analysts subsequently traveled to Saudi Arabia, inspected the crates and returned satisfied that the missiles were not designed to carry nukes, says the source, who asked for anonymity in exchange for discussing the still-secret deal.

The CIA declined to comment, as did current and former White House officials. The Chinese and Saudi embassies in Washington did not respond to requests for comment.

Reports that the Saudis have upgraded their missile fleet, however, are not new. Former CIA analyst Jonathan Scherck, for example, who managed intelligence reports on Saudi Arabia as a contractor from 2005 to 2007, claimed in Patriot Lost, an unauthorized 2010 book, that China began supplying a "turnkey nuclear ballistic missile system" to the kingdom with the covert approval of the George W. Bush administration, "no later than December 2003."

Lewis discounts Scherck's "nuclear" claim, which Scherck says he based on reports he saw from CIA spies and technical collection systems.

Kenneth Pollack, a former CIA and White House National Security Council expert on the Middle East, also dismisses Scherck's nuclear scenario, as well as recent claims by the BBC and Time magazine - citing a former head of Israeli military intelligence - that the Saudis had placed Pakistani nuclear warheads "on order."

"Nonsense and disinformation," he told Newsweek.

But Lewis says that other small but important details in Patriot Lost checked out. "One can raise a number of questions about the logic in Scherck's book - particularly when he starts imagining Pakistani warheads on those Chinese missiles or accusing Bush administration officials of various crimes," Lewis explains, "but when Scherck sticks to the details about monitoring foreign missile shipments and deployments, he's believable."

An engineer on a U.S. Navy guided missile cruiser before joining the CIA, Scherck was fired in 2008 for pursuing details out of channels at the National Geospatial Agency, the satellite imagery service helmed by James Clapper when he began to dig into the missile mystery. Clapper is now director of National Intelligence. Then the Justice Department pounced on Scherck, seizing the modest revenues from his self-published book and prohibiting him from writing or talking further about the matter. Now 39, Scherck works as a night manager of a hotel in Southern California while he works on a screenplay.

Meanwhile, the Saudis have been acting like they want people to take notice of their previously furtive missile program.

"Over the past few years, Saudi Arabia has started talking a lot about its Strategic Missile Force," Lewis writes in the draft of an upcoming piece for Foreign Policy that he showed Newsweek. "And, in the course of doing so, Riyadh seems to be hinting that it has bought at least two new types of ballistic missiles."

"For example," Lewis writes, "in 2010, Khaled - by then deputy defense minister - cut the ribbon on a new headquarters building in Riyadh for the Strategic Missile Force. They released a number of images of the building, both inside and out. Moreover, since about 2007, the Saudi press has covered graduation ceremonies from the Strategic Missile Force school in Wadi ad-Dawasir - especially if the commencement speaker is a person of importance.

"The process of recruiting Saudis has also resulted in fair amount of information appearing in print, right down to the pay schedule," he added. "For a while, the Strategic Missile Force even had a website, although it is no longer active."

The most intriguing photo to appear so far, showed "Khaled's replacement - the recently removed deputy minister of defense Prince Fahd - visiting the Strategic Missile Force headquarters in Riyadh," Lewis writes. Instead of gifting him with the usual "solid-gold falcon in a glass case... the stuff dreams are made of," Lewis cracks, officials are shown posing with a glass-enclosed case of three missile models.

"The missile on the far left is, obviously, a DF-3 of the sort that Saudi Arabia purchased from China in the late 1980s," Lewis writes. "But the other two? They could any one of Chinese or Pakistani missiles. All the missiles Lewis mentions are nuclear-capable.

Again, the unprecedented missiles-and-pony show could be a deception. In any case, the Saudis are banging the drums around their missile bases - without any apparent notice here, Lewis says, probably because it's all in Arabic.

The local Saudi press has been covering blood drives and disaster relief efforts by personnel at known missile bases, Lewis tells Newsweek. And while officials have been secretive about another missile base, he's discovered that "people on Arabic bulletin boards have big mouths.

"Turns out, if you're a Saudi assigned to a launch unit," he says, "the most natural thing in the world is to announce on a bulletin board, 'Hi, I work for the Saudi missile force, and I've been assigned to this place, and where can I get an apartment?' And people openly talk about their deployments in a way that Saudi officials would freak if they realized it."

Maybe. But you can't scare people if nobody knows what you got. Maybe the Saudis are suddenly trying to get attention. They've faced the deterrence dilemma before.

In late 1988, Khaled recalled in his memoir, he worried that nobody had detected the deployment of the secretly acquired Chinese DF-3s. What good was having them if nobody was afraid of them? He suggested leaking their existence, "as the object of acquiring the weapon would not have been achieved" unless the world (read: Iranians and Israelis) knew about it. "As it happened," he wrote in Desert Warrior, "we had no need to do so, because the Americans broke the news first." And they were in a king's rage about it.

But what about the 2007 Chinese missile deal Newsweek was told about? No one seems to have noticed that, either.

But they may now.

Important note: Those DF-21s - or whatever they are - don't dramatically tilt the Middle East map in the Saudis' favor.

"Even if it is the case that Saudi Arabia received DF-21 missiles, unless they also received nuclear warheads for the missiles, it has little meaning for the regional military balance," Pollack told Newsweek.

"Saudi Arabia has had Chinese ballistic missiles since the 1980s, and the DF-21 has a shorter range than the CSS-2s they originally bought. A conventional warhead on the DF-21 would be too small to cause the kind of damage that would have a strategic impact. Even if the Chinese had sold Saudis the mod-4 warhead for the DF-21 - which theoretically can cripple an aircraft carrier - the Saudis lack the sensor technology to find an aircraft carrier, except when one is docked at Port Jebel Ali in the UAE, Saudi Arabia's close ally."

Lewis agrees - with caveats. When you're talking nukes and missiles, you always have to factor in the weird stuff, like Kissinger whispering to Hanoi that Nixon was bonkers over Vietnam and would slap the armageddon button if pushed too far - the so-called "madman theory."

"It has its advantages, it definitely has its advantages," Lewis says of the new Saudi missiles deal, if only because some of those missiles could have been modified to carry nuclear warheads after CIA technicians left. "But I don't know if I were an Iranian I would feel fundamentally different about the DF 21s than I did about the DF-3.... "

He adds, "Maybe there's a whole gut, or visceral, thing, where they" - the Iranians - "say, 'Hey, these guys spent a lot of money, they're serious.' So maybe it just conveys the Saudis' will in a way that is unsettling, in a way that the fine old missile system wasn't.

"It's a weird thing. It has its own, strange logic. So yeah, it makes a difference. But it's not a difference-maker."

Newsweek Contributing Editor Jeff Stein writes the SpyTalk column from Washington.